Fundraising Strategies for Large Institutions

In this post, I share thoughts from a board member who has served on boards for very large, institutional organizations. He correctly reflects that fundraising strategies for these boards differ from those for medium-sized or small, community-based organizations. Still many of his insights can be applied to all boards.

This post is the sixth in my series about nonprofit fundraising. In my last post, in contrast to this one, a board member shares several examples about fundraising for small and even all-volunteer organizations.

Going back, in the first of the series, I shared a story about a successful capital campaign where a board member learned about the different ways to encourage a stretch gift. In the second, a board member describes how they tied the organization’s values to its fund development plan. The third post talked about the roles of the fund development chair and the need for staff support. My fourth post outlined how you can have your board members thank donors.

Bring Potential Large Donors onto Your Board

As told by a Board Member somewhere in the US

I have been on the board of some big institutional nonprofits including a major university and a large, well-respected local museum. So, I have an unusual perspective around fund development.

Universities Have Unique Connections Other Organizations Lack

The university has tens of thousands of alumni — a whole cadre of talent, people, wealth. The museum is a local organization that has been around for over 100 years. It is well respected, but there is no natural connective tissue. A successful alumnus will give millions to a university because he felt the university fundamentally transformed his life. He has been very successful, so he shares that back. You don’t really see that in a museum. You don’t see people saying this place fundamentally changed my life. What you have is a different way of raising money for different institutions.

Two Fundraising Strategies Essential for Large Campaigns

No matter the institution, I think development requires two separate strategies. I chaired a campaign at the university years ago. It was a huge campaign—nearly $2 billion. 70% of the money we raised came from about 200 people. The other 30% came from 100,000 people. I believe that in any development effort of scale – I am not talking about a $4 or 5 million nonprofit — you have to design your development organization to approach the top of the pyramid differently than your large constituency. What has surprised me is how few organizations actually do this. They may say “Oh yes, we have the principal gifts and we have the others.” But organizationally, they don’t distinguish sufficiently. Part of it is you don’t want people to feel there are the haves and the have nots. On the other hand, you have to take into consideration the realities of raising money.

The Largest Gifts Are from Board Members

I was personally involved in raising money of $10 million and above, the top of the pyramid. You need individualized approaches, one-on-one contact, and true involvement — not just lip service to “getting them involved.” You actually put them on your board. I did an analysis on this. In almost every case, our largest gifts – the 10-, 25-, 50-million-dollar gifts – were from trustees, from people who are part of the governance of the institution. I think that is really important. 

Here is an example: We had an older, very successful alum. He did not have children. We put him on the board. After the first meeting, he called the board chair and said that he had changed his will and was giving more money to the university. He also gave a huge gift the next year. 

Most people give away 80% of their philanthropic wealth in the last couple years of their life. But most organizations put you on the board when you are 30- or 40-years old because they want young blood. By the time you are 75- or 80-years old, you think, “I have made all this money. My kids are well taken care of. And I have extra to give away. Where should I give it?” I personally believe we have to put 70-year-old plus alumni on the board. It’s great from the development perspective. And the alum could not be happier.

You still have to think about smaller gifts. You can still raise tens of millions in small donations if you keep people connected. But you can’t have a staff large enough to keep in touch with thousands of alums. So, a large volunteer force is needed to focus on the annual campaign. This force is the connective tissue.

At the museum, the same thing was true. Our larger gifts were scaled differently. These would be one- to five-million-dollar gifts. They usually came from people who had wealth and who we put on the board. Every once in a while, the development office would tell me we had to cultivate some person because they could give a lot of money. They would tell me that we did not have to put them on the board because we aligned with their priorities. And it was relatively unsuccessful. Then we put the person on the board and bingo.

Chair Responsible for Making Board Members Feel Valued

To be honest, this makes the board heavy on financial capacity. I think you need governing bodies to be diverse, you need them to reflect the various constituencies. You solve this by having large boards. The university has a 50-person board. The museum has a 40-person board. You need a large board so you can do both. You can’t have a 12-person board and execute what I just said.

This is subtle. At the museum, for example, by our charter, we needed a certain amount of diversity. You have to assure these people that what they contribute matters because it does. You don’t them to worry that they did not give a large gift. It is the board chair’s role to make all people feel valued and connected to the institution.

At Large Institutions, Staff-Centric Fundraising Produces Results

I am a little bit betwixt and between on the role of board members raising money from other people. I am not sure what the right answer is. Let me give you two contrasting points of view. When we did the campaign at the university a decade ago, another board member and I must have made 200 solicitations of big gifts. We had a half dozen or more alumni volunteers who also asked for money. We had excellent results. The more recent campaign is more staff centric. And to be honest, the results are also great. I have banged my head up against the wall about this, but it seems to be increasingly difficult over the last five or six years to get volunteers to really deliver and make asks on behalf of nonprofits. I don’t know why it is. At the museum 12 years ago, we would go through lists and people would say I know this person. I will make a call. It has kind of gone away. I have no idea whether it is just the organizations I have been involved with or whether it is a trend because the staff is getting more professional. Not making a judgment good or bad.

I am talking about huge organizations. My wife is a board member of a smaller organization. It has a budget of eight- or nine-million dollars. That board is critical for making connections to donors, to foundations, and their own philanthropy. You can’t join that board and not be willing to do that.

I also wonder how donors feel about being approached by a volunteer versus staff, especially as development staff have gotten more and more professional. The human behavior around this stuff is so interesting and never one size fits all. I have seen donors feel very comfortable with both. The president of the college and I would call on some alums together. Sometimes it felt like having me – the volunteer — distracted from the conversation. The president observed that these people did not want to talk to a trustee. They wanted to talk to the president. And a good head of development can execute very well. The museum and the university are also different. In a university setting, alumni can have a 50-year relationship with the institution. Alumni provide continuity. A local organization like a museum doesn’t benefit from that continuity. So, the staff have to provide the continuity.

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